Starbucks provides a road map for brands on how to tackle a crisis.
Starbucks, one of the most ubiquitous coffee franchises around the world, is never far from the headlines. The company, since their founding in 1971, are seen as the poster child for the rapid deployment of a successful franchise model and does business in over 28,200 locations in over 75 countries. Over the years, Starbucks have established a reputation for espousing liberal causes and a globalist inclusive outlook. The company’s corporate value proposition states as much rather eloquently “To inspire and nurture the human spirit – one person, one cup and one neighbourhood at a time.”
Even the name Starbucks is inspired by the honour bound but free-thinking and status quo questioning first mate from Herman Melville’s classic Moby Dick. The company has long supported liberal causes such as promising to hire more than 10,000 refugees (over 2,500 just across Europe) over five years across the globe, including recipients of DACA; support for gay marriage and famously for the design of their iconic seasonal coffee cups, which for many years were deemed by conservatives to be a “war on Christmas”.
But that was then. Come 2018 and Starbucks was wracked by a series of scandals, involving members of minority groups in the US and Starbucks staff who either misbehaved by using racial slurs or in one instance calling law-enforcement officers to remove them from store premises. The crisis was widely reported around the world and threatened grievous harm to Starbucks brand vision developed around inclusivity, inspiration and open-mindedness. As it happened, Starbucks quickly responded to the crisis; a response many brand experts believe provides a road map on how to tackle crisis and renew the brand promise.
Starbucks announced that they would close their entire network of over 8,000 US based stores on the afternoon of May 29 to conduct staff training.
Be genuine and more importantly, be honest!
Instead of sweeping the crisis under the carpet, Starbucks acknowledged they had failed their customers’ expectations at the highest level. Both the CEO and the Chairman released statements to this effect and promised the company would do whatever it took to turn things around. Many believe that admitting the problem without any spin was hugely liberating for the brand and freed up resources from damage control to corrective action which ultimately built up more brand equity.
Starbucks reached out (including organising meetings with the CEO) to all the individuals subjected to racial bias at Starbucks locations and offered to give them whatever it took to address their grievances. Industry observers felt that this was a masterstroke from a branding standpoint because it proved to customers that Starbucks, although addressing the core problem at company level, had not lost touch with the individuals impacted directly by the problem. So, while the business worked to fix the organisational issue, the brand maintained the connection with each customer who was at the receiving end.
Do not deviate from your roots
Rather than announce a new brand positioning with a slick campaign which many brands in crisis do, the company continued to connect with their massive customer base by maintaining there was nothing wrong with Starbucks’ existing brand promise and that it was the company which had failed (and not the value proposition). They released an unconditional apology for the incidents and announced measures aimed at ensuring that Starbucks would always remain a safe and inclusive place for all patrons. The message was: “We understand what you like about us, that doesn’t change; what changes is the energy we bring to bear to live up our commitment to you.”
Starbucks also announced they would seek assistance from leading experts and national civil rights organisations, as well as government organisations in order to tailor the training accordingly.
(Immediate) actions speak louder than words!
The new rules included permitting anyone sit in the coffee shop and use the restrooms, even 'without purchase'. The most extensive initiative was the launch of a nationwide programme of “unconscious bias training” at all their US store locations. To kick-off the training programme, Starbucks announced that they would close their entire network of over 8,000 US based stores on the afternoon of May 29 to conduct staff training. The training would be given to nearly 175,000 staff members and address the following key areas: implicit bias; discrimination prevention; conscious inclusion; and ensuring all stores would offer a safe and welcoming environment to all customers. According to Starbucks, the entire effort would cost $15 million in terms of loss of sales (not including training and administrative costs).
Commit to the long-term
Starbucks also announced they would seek assistance from leading experts and national civil rights organisations, as well as government organisations in order to tailor the training accordingly. Furthermore, they offered to provide the training curriculum and other assets of the programme to any company wishing to run a similar initiative for their employees.
Make sure YOU tell YOUR story
What had happened could not be reversed, so rather than try to contain the damage, Starbucks chose to control the narrative. This is essentially, where the true genius of the Starbucks plan was. They refused to compromise on their value proposition. Instead, they doubled down and began a broader conversation about the hot button topic of race relations. This made Starbucks relatable to their customers and true to their original core brand promise. All of which are great wins from a crisis so profound.
Tariq Ziad Khan is a US-based marketer and a former member of Aurora’s editorial team. email@example.com